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MPAA unveils grim piracy study

Report sez DVD bootlegging down

The MPAA has released its first comprehensive study of worldwide piracy, and while the figures are grim, org now estimates bootleg DVDs aren’t as big a problem as it previously thought.

New analysis, conducted by LEK Consulting, finds that the total cost of piracy to the motion picture industry was $6.1 billion in 2005. Hard goods piracy — illegal copies of DVDs — are estimated to account for $2.4 billion.

That’s notable, since MPAA previously said hard goods piracy cost its members $3.5 billion in 2004, based on an earlier study.

About $2.3 billion of loss is estimated to have come from illegal Internet downloads, while $1.4 billion resulted from illegal copies made for friends of legitimate DVDs. Unlike music CDs, DVDs are copy protected, and it is illegal to make even a single copy.

Study found that China, Russia and Mexico are the markets most affected by piracy. Org estimates that 93% of the potential film market in China was lost due to piracy, 81% in Russia and 62% in Mexico.

The U.S. accounts for $1.3 billion worth of piracy, while European piracy was valued at $2.4 billion, half of the foreign total.

Illegal copying was the most common form of piracy in the U.S., indicating that many may see it as tantamount to copying a CD for a friend. Bootleg DVDs and Internet downloads are more common overseas, where illegal distribution methods tend to be more prominent and often bigger than legitimate ones.

Unsurprisingly, study found that the typical pirate is a male between 16 and 24 who lives in urban areas. The vast majority of people engaging in illegal downloading fit that profile.

In the U.S., college students account for the most piracy among all demographic groups.

MPAA provided parts of the study to the U.S. Trade Representative to use in its annual report on worldwide intellectual property theft and plans to use the data as part of its global lobbying efforts for antipiracy enforcement.

As such, org has every incentive to provide pessimistic estimates of the cost of piracy. However, this study was the first to take into account all forms of piracy and detailed research on consumer behavior in major markets around the world.

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